Connect Media asked James Flynn, president and chief investment officer of Hunt Mortgage Group, to share some of the key insights about agency lending, investor preferences and predictions for the multifamily sector.

Q: What’s the outlook for agency lending in 2018?A: I would expect another big year for agency lending. It may tick down a bit from last year, but could be up as much as 5-10% depending on uncapped liability and values.

Q: Are you seeing investors and your clients diversify away from multifamily? What are they looking at? If not, why multifamily?A: I think increasing rates and volatility provides for a more diversified pool of investment options for all capital. That being said, multifamily is still seen as a bit more stable in downturns than other real estate classes. Economic and population dynamics have been positive for multifamily over the past several years, while many other classes have seen negative factors and headwinds. As stated, the true “opportunistic” buckets in all classes of real estate and investment tend to open as rates increase faster than values.

Q: What is your prediction for how long multifamily will continue to outperform other product types? Are you seeing any changes in the market?A: I do expect multifamily to outperform most real estate sectors for the next couple of years, but it is becomingly increasingly market, sponsor and product-type specific. The current environment will provide opportunities outside multifamily that are attractive. How real estate is built, positioned and marketed is changing, and that is not captive to multifamily.

Developers and investors are smart, and they are already adapting to new ideas around retail, office and industrial. Things will revert to the norm as they always do, but may take another 1-2 years.